Taiwan's government proposed a record defense budget of 1.12 trillion New Taiwan dollars, about $35 billion, for 2027 as military and political pressure from China intensifies. The plan signals a larger effort to strengthen deterrence around the self-governed island.
The proposed allocation represents an 18% increase from the 2026 budget proposal and would take military spending above 3% of estimated gross domestic product. President Lai Ching-te has pledged to lift the defense share to 5% of GDP by 2030 and has described national defense spending as an investment in peace.
China regularly sends military aircraft, coast guard ships and other vessels toward Taiwan and periodically conducts large-scale exercises around it. Beijing claims the island as part of its territory and has not renounced the use of force to bring it under its control.
Taiwan recently increased the intensity of its annual Han Kuang exercises, which simulate a response to a possible Chinese invasion. The drills brought more reservists and civilians into realistic wartime scenarios, including a temporary reduction of mobile internet service to text-only speed in parts of the island.
The spending plan will go to the opposition-controlled legislature for review before the end of August. That process could be difficult: lawmakers approved the central government's 2026 budget only last Friday after a record delay of 266 days.
Washington has pressed Taipei to raise its defense spending. The United States has no formal diplomatic relationship with Taiwan but maintains extensive unofficial ties and is required under American law to provide the island with the means to defend itself, making it Taiwan's main arms supplier and informal supporter.
The security relationship also carries uncertainty. During Donald Trump's visit to Beijing in May, Chinese President Xi Jinping warned that the two powers could clash over Taiwan if the issue was mishandled; after the trip, Trump called arms sales to Taipei a useful negotiating tool with China, causing concern on the island.
Taiwan and China have been governed separately since 1949, when Communist forces took power in Beijing and the defeated Nationalist government moved to the island. The record budget now links that unresolved political divide to a rapid buildup of military readiness and civil resilience.
